Citation Nr: 21069334 Decision Date: 11/18/21 Archive Date: 11/18/21 DOCKET NO. 08-30 076 DATE: November 18, 2021 ORDER Restoration of a total disability rating based on individual unemployability due to service-connected disabilities (TDIU) effective November 1, 2007 is granted. FINDING OF FACT There was not clear and convincing evidence that the Veteran was capable of more than marginal employment at the time his TDIU was terminated. CONCLUSION OF LAW The termination of a TDIU, effective November 1, 2007, was not proper, and the criteria for restoration of TDIU have been met. 38 U.S.C. §§ 1155, 5107; 38 C.F.R. §§ 3.105, 3.343, 4.16. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from September 1969 to July 1971. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an October 2007 rating decision of the Department of Veterans Affairs (VA) Regional Office (RO), which discontinued TDIU effective November 1, 2007. This matter was previously before the Board in December 2011, February 2017 and July 2019, at which time it was remanded to obtain relevant case notes from the VA's Office of the Inspector General (OIG). The RO attempted to obtain the records several times, but the records were deemed unavailable. In a June 2021 final attempt letter, the RO determined that any further attempts would be futile. Restoration of a total disability rating based on individual unemployability due to service-connected disabilities (TDIU) effective November 1, 2007 The Veteran asserts that his TDIU rating should have not discontinued because he has not worked since 2001. The Veteran was originally granted a TDIU rating in an August 2005 rating decision, effective December 28, 2004. The RO sent the Veteran correspondence in January 2007, proposing to discontinue his TDIU benefits because he did not provide a completed VA Form 21-4140, with information about his employment status. The correspondence informed him that if VA did not receive a completed form within 60 days, it would reduce his benefits. In March 2007, VA received a signed VA Form 21-4140, in which the Veteran reported that he had not been employed within the previous 12 months. The RO, however, noted that the Veteran was self-employed at his aircraft tool company. In October 2007, the RO issued a rating decision that formalized the final action based on the proposed discontinuance. "The circumstances under which rating reductions can occur are specifically limited and carefully circumscribed by regulations promulgated by the VA Secretary." Dofflemyer v. Derwinski, 2 Vet. App. 277, 280 (1992). In reducing a rating of 100 percent service-connected disability based on individual unemployability, specifically, the provisions of 38 C.F.R. § 3.105(e) are for application, but caution must be exercised in such a determination that actual employability is established by clear and convincing evidence. 38 C.F.R. § 3.343(c). Under 38 C.F.R. § 3.343(c)(1), the reduction of a rating of 100 percent service-connected disability based on individual unemployability must be based on a determination that actual employability is established by clear and convincing evidence. The clear and convincing standard of proof is an intermediate standard between preponderance of the evidence and beyond a reasonable doubt. Fagan v. West, 13 Vet. App. 48, 55 (1999); Olson v. Brown, 5 Vet. App. 430, 434 (1993). Substantially gainful employment is defined as work which is more than marginal, and which permits the individual to earn a living wage. Moore v. Derwinski, 1 Vet. App. 356 (1991). In Faust v. West, 13 Vet. App. 342 (2000), the Court defined "substantially gainful employment" as an occupation that provides an annual income that exceeds the poverty threshold for one person, irrespective of the number of hours or days that the Veteran actually works and without regard to the veteran's earned annual income. More recently, the Court has clarified that the establishment of a TDIU has both an economic component and a non-economic component. Ray v. Wilkie, 31 Vet. App. 58, 73 (2019). The economic component means an occupation earning more than marginal income (outside of a protected environment) as determined by the U.S. Department of Commerce as the poverty threshold for one person. The non-economic component includes consideration of: the Veteran's history, education, skill, and training; whether the veteran has the physical ability to perform the type of activities required by the occupation at issue; and whether the veteran has the mental ability to perform the activities required by the occupation at issue. Id. As it relates to the Veteran's history of self-employment, the Board notes that employment in a protected environment such as a family business or sheltered workshop may be considered marginal employment on a facts found basis. 38 C.F.R. § 4.16(a). Additionally, under 38 C.F.R. § 4.16(a), marginal employment shall not be considered substantially gainful employment. The term "protected environment" is not defined in VA regulation, but requires consideration of the particular facts of each Veteran's case. Cantrell v. Shulkin, 28 Vet. App. 382, 390 (2017). A May 2007 correspondence notes the Veteran was self-employed part time in his aircraft tool and technology company. As such, the appeal turns on whether his self-employment constitutes "marginal employment." VA regulation provides that when adjudicating claims for TDIU, marginal employment or the ability to work sporadically shall not be considered to be substantially gainful employment. 38 C.F.R. § 4.16(a). Thus, a TDIU may still be awarded in such instances where a veteran's employment is deemed to be "marginal employment," because he cannot engage in more lucrative substantially gainful employment. The Board finds that clear and convincing evidence has not been shown to determine that the Veteran was actually capable of obtaining and maintaining substantially gainful employment. Here, the Veteran contends that he was not employed during the appeal period and only received royalties from his self-employed business. In his February 2008 Notice of Disagreement, the Veteran stated that any income he received has been sporadic, noncontractual and unpredictable. He contends that he received occasional and unpredictable royalties from a patent. The Veteran's 2006 tax return showed business income of $29,875. He also submitted 2007 1099-MISC Forms, that reported non-employee compensation from two separate payers. The first was from an oil well royalty check and the other was from DFAS for the sale of a tool sold in 2005. He alleges that he had a negative balance for his self-employed company in 2007 and the combined income for 2007 would not be enough to require filing a tax return. The Veteran also submitted his business checking account statements from August 2006 to December 2007. The deposits show that there was a one-time deposit in September 2006 for about $29,000. The other deposits were primarily VA benefit checks. He contends that he had no other income and he cooperated with all field examinations. In his September 2008 Form 9, the Veteran stated he was interviewed by VAOIG agents regarding his income from his company. He stated he was actually in debt at the time and continued to promote his products. VA requested documentation from VA OIG pertaining to the investigation, however, the response stated no formal investigation was conducted. A referral transaction report showed that the case was sent back to the RO for administrative action. There were no additional investigative notes or materials, however, it was suggested that there may have been a paper file, but it was archived. The RO contacted the VAOIG seven times since October 2020, however, as noted above, attempts to locate the paper notes were futile and a final determination letter was sent to the Veteran. Upon careful consideration of the evidence regarding the Veteran's employability, the Board finds there was no clear and convincing evidence that the Veteran had been capable of employment at the time his TDIU was terminated. There was only a one-time payment of $29,000 and the other income in his checking account comprised of VA benefits. The Veteran stated that the payment was for his patent, and he was unable to do substantially gainful work in his company. Finally, it appears from the evidence currently of record that after interviewing the Veteran, the VAOIG did not conduct a full formal investigation. Thus, there is no clear evidence of ongoing substantially gainful employment during the appeals period. As such, the criteria for terminating his TDIU were not met and restoration of TDIU is granted from November 1, 2007. S. Sorathia Acting Veterans Law Judge Board of Veterans' Appeals Attorney for the Board B. Jaigirdar, Associate Counsel The Board's decision in this case is binding only with respect to the instant matter decided. This decision is not precedential and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.